New Port Authority conflict issue emerges: NJ Transit got $1 lease while a client of David Samson's law firm

By SHAWN BOBURG

staff writer |

The Record

Port Authority Chairman David Samson, embroiled in controversies over whether clients of his law firm benefited from his public position, voted to give another client – NJ Transit – a $1-per-year lease on a valuable park-and-ride lot in North Bergen, records show.

At the time of the Feb. 9, 2012, vote, Samson’s firm, Wolff & Samson, was getting up to $1.5 million to advise NJ Transit on how to maximize profits from dozens of its commuter lots, including the one in North Bergen, according to public documents.

The 49-year lease for the commuter lot near Route 495 means the Port Authority will collect millions less in revenues — NJ Transit previously paid the authority $900,000 a year for use of the lot, which is used by hundreds of commuters each day.

Samson has become a central figure in the controversies arising out of the George Washington Bridge lane-closure scandal. News of his vote comes as the Port Authority’s board is poised to cast critical votes today on its long-term capital and operating budgets. A spokeswoman for Samson said he will recuse himself from both budgets, which set the basic agendas of the agency’s day-to-day operations as well as projects it wants to pursue over the next decade. Samson’s personal spokeswoman, who is not affiliated with the Port Authority, did not explain why he would not vote.

This is the third time this year that Samson, who was appointed by Governor Christie, has come under scrutiny for overlapping interests related to his law firm, which also has contracts with the New Jersey Turnpike Authority.

“It seems like the tentacles of Wolff & Samson have infiltrated so many aspects of the public transportation system in New Jersey,” said political science professor Brigid Harrison of Montclair State University. “These questionable practices keep repeating themselves. What otherwise might seem like isolated incidents of bad judgment and individual conflicts of interest are creating a pattern in which Wolff Samson, and David Samson, are essentially exercising very broad authority across the state to benefit their firm and their private clients.”

A spokeswoman for Samson did not provide answers to questions sent late Wednesday afternoon.

Samson also voted for a $256 million reconstruction of the rundown PATH station in Harrison three months after a builder represented by his law firm proposed converting a nearby warehouse into hundreds of luxury apartments, The Record reported last month. And his firm is at the center of allegations by the Hoboken mayor, Dawn Zimmer, that the Christie administration threatened to withhold Superstorm Sandy recovery money from her city if she did not approve a real estate development represented at the time by Samson’s firm. A $75,000 Port Authority-funded land-use study was favorable to Samson’s former client, The Rockefeller Group. It’s unclear if Samson had any involvement in the land-use study, and the Christie administration has denied Zimmer’s claims. Rockefeller cut ties with Wolff & Samson as the controversy unfolded.

At least two former high-ranking Christie administration officials now work as attorneys in Samson’s law firm. And the firm has seen an uptick in public-contract dollars since Christie took office in 2010, making close to $5 million from state, county and local governments in 2012, records show.

In September 2010, Wolff & Samson was hired by NJ Transit — at an estimated cost of $650,000 — as special counsel for an initiative to privatize the mass transit agency’s parking lots. The idea was to turn over operation of NJ Transit’s parking lots to private companies. In turn, those companies pay NJ Transit for the right to operate the sites, presumably resulting in a net gain for the transit agency and potentially higher rates for users.

In July 2011, records show, the value of Wolff & Samson’s contract with NJ Transit was increased to $1.5 million. According to agency records, the firm advised NJ Transit “on a broad array of multi-faceted legal issues inherent in existing and prospective parking agreements and public-private partnerships.” The firm’s advice was needed “to continue to develop a program to optimize the value of its parking asset portfolio.”

Seven months later, Samson voted as Port Authority chairman to authorize the agreement with NJ Transit for the North Bergen lot. The Port Authority had leased the parking lot to the mass transit agency starting in 1955, records show.

The pay-to-park lot, at the intersection of Routes 495 and 3, has 750 parking spaces. Buses pick up commuters at the lot and head into Manhattan through the Lincoln Tunnel. A $9.50 fare covers a parking space and a round trip to the Port Authority’s bus terminal in midtown.

The Port Authority’s February 2012 resolution authorizing the new lease cited NJ Transit’s parking-lot initiative. NJ Transit intended to ask private companies for proposals to operate the North Bergen lot and others run by NJ Transit. That privatization has not yet occurred. The Port Authority also said the move would indirectly encourage mass transit.

The new lease agreement, the Port Authority stated in the resolution, would “lessen the potential for future substantial fare increases to NJT’s [New Jersey Transit’s] bus passengers, which could erode ridership” and increase the number of single-occupancy cars using the Port Authority’s tunnel.

A spokesman for NJ Transit, John Durso, said the agreement also lessened the impact of the Port Authority’s September 2011 toll hikes on bus customers. NJ Transit’s commuter buses pay tolls on Hudson River crossings. Durso said the increases raised the agency’s toll costs from $5.8 million in 2011 to more than $10.1 million in 2012. Durso also said that NJ Transit officials had no discussions with Samson about the lease of the Port Authority land in North Bergen.

The parking-lot privatization plan, meanwhile, appears to be in limbo. An NJ Transit spokesman did not provide the status of the initiative, called System Parking Amenity and Capacity Enhancement Strategy, on Tuesday. There has been no mention of it since July 2011 in the official accounts of NJ Transit’s board meetings.

The last time it was raised was at that July 2011 meeting when the fees to Wolff & Samson were authorized to go up to $1.5 million.

Harrison, the political science professor, said Samson should not have voted given his law firm’s financial ties, even if there were good policy reasons for the new lease. “He should have just abstained.”

New Port Authority conflict issue emerges: NJ Transit got $1 lease while a client of David Samson's law firm

Port Authority Chairman David Samson, embroiled in controversies over whether clients of his law firm benefited from his public position, voted to give another client – NJ Transit – a $1-per-year lease on a valuable park-and-ride lot in North Bergen, records show.

At the time of the Feb. 9, 2012, vote, Samson’s firm, Wolff & Samson, was getting up to $1.5 million to advise NJ Transit on how to maximize profits from dozens of its commuter lots, including the one in North Bergen, according to public documents.

The 49-year lease for the commuter lot near Route 495 means the Port Authority will collect millions less in revenues — NJ Transit previously paid the authority $900,000 a year for use of the lot, which is used by hundreds of commuters each day.

Samson has become a central figure in the controversies arising out of the George Washington Bridge lane-closure scandal. News of his vote comes as the Port Authority’s board is poised to cast critical votes today on its long-term capital and operating budgets. A spokeswoman for Samson said he will recuse himself from both budgets, which set the basic agendas of the agency’s day-to-day operations as well as projects it wants to pursue over the next decade. Samson’s personal spokeswoman, who is not affiliated with the Port Authority, did not explain why he would not vote.

This is the third time this year that Samson, who was appointed by Governor Christie, has come under scrutiny for overlapping interests related to his law firm, which also has contracts with the New Jersey Turnpike Authority.

“It seems like the tentacles of Wolff & Samson have infiltrated so many aspects of the public transportation system in New Jersey,” said political science professor Brigid Harrison of Montclair State University. “These questionable practices keep repeating themselves. What otherwise might seem like isolated incidents of bad judgment and individual conflicts of interest are creating a pattern in which Wolff Samson, and David Samson, are essentially exercising very broad authority across the state to benefit their firm and their private clients.”

A spokeswoman for Samson did not provide answers to questions sent late Wednesday afternoon.

Samson also voted for a $256 million reconstruction of the rundown PATH station in Harrison three months after a builder represented by his law firm proposed converting a nearby warehouse into hundreds of luxury apartments, The Record reported last month. And his firm is at the center of allegations by the Hoboken mayor, Dawn Zimmer, that the Christie administration threatened to withhold Superstorm Sandy recovery money from her city if she did not approve a real estate development represented at the time by Samson’s firm. A $75,000 Port Authority-funded land-use study was favorable to Samson’s former client, The Rockefeller Group. It’s unclear if Samson had any involvement in the land-use study, and the Christie administration has denied Zimmer’s claims. Rockefeller cut ties with Wolff & Samson as the controversy unfolded.

At least two former high-ranking Christie administration officials now work as attorneys in Samson’s law firm. And the firm has seen an uptick in public-contract dollars since Christie took office in 2010, making close to $5 million from state, county and local governments in 2012, records show.

In September 2010, Wolff & Samson was hired by NJ Transit — at an estimated cost of $650,000 — as special counsel for an initiative to privatize the mass transit agency’s parking lots. The idea was to turn over operation of NJ Transit’s parking lots to private companies. In turn, those companies pay NJ Transit for the right to operate the sites, presumably resulting in a net gain for the transit agency and potentially higher rates for users.

In July 2011, records show, the value of Wolff & Samson’s contract with NJ Transit was increased to $1.5 million. According to agency records, the firm advised NJ Transit “on a broad array of multi-faceted legal issues inherent in existing and prospective parking agreements and public-private partnerships.” The firm’s advice was needed “to continue to develop a program to optimize the value of its parking asset portfolio.”

Seven months later, Samson voted as Port Authority chairman to authorize the agreement with NJ Transit for the North Bergen lot. The Port Authority had leased the parking lot to the mass transit agency starting in 1955, records show.

The pay-to-park lot, at the intersection of Routes 495 and 3, has 750 parking spaces. Buses pick up commuters at the lot and head into Manhattan through the Lincoln Tunnel. A $9.50 fare covers a parking space and a round trip to the Port Authority’s bus terminal in midtown.

The Port Authority’s February 2012 resolution authorizing the new lease cited NJ Transit’s parking-lot initiative. NJ Transit intended to ask private companies for proposals to operate the North Bergen lot and others run by NJ Transit. That privatization has not yet occurred. The Port Authority also said the move would indirectly encourage mass transit.

The new lease agreement, the Port Authority stated in the resolution, would “lessen the potential for future substantial fare increases to NJT’s [New Jersey Transit’s] bus passengers, which could erode ridership” and increase the number of single-occupancy cars using the Port Authority’s tunnel.

A spokesman for NJ Transit, John Durso, said the agreement also lessened the impact of the Port Authority’s September 2011 toll hikes on bus customers. NJ Transit’s commuter buses pay tolls on Hudson River crossings. Durso said the increases raised the agency’s toll costs from $5.8 million in 2011 to more than $10.1 million in 2012. Durso also said that NJ Transit officials had no discussions with Samson about the lease of the Port Authority land in North Bergen.

The parking-lot privatization plan, meanwhile, appears to be in limbo. An NJ Transit spokesman did not provide the status of the initiative, called System Parking Amenity and Capacity Enhancement Strategy, on Tuesday. There has been no mention of it since July 2011 in the official accounts of NJ Transit’s board meetings.

The last time it was raised was at that July 2011 meeting when the fees to Wolff & Samson were authorized to go up to $1.5 million.

Harrison, the political science professor, said Samson should not have voted given his law firm’s financial ties, even if there were good policy reasons for the new lease. “He should have just abstained.”